Imagine if you’re able to lower monthly payments by $300-400 a month. You’ve now got extra cash on hand to fund the remodeling job you’ve been wanting to do.

Renovation Loans

You could also look into a renovation loan, such as the FHA 203k, HomeStyle Renovation loan from Fannie Mae, or the Renovation Mortgage from Freddie Mac.

While these types of loans do come with refinance options, they also allow borrowers to get a purchase loan and renovation loan in one shot, making life easier for those in need of renovations or repairs.

Lenders will even let borrowers get funds based on the “as-completed” home price factoring in the proposed improvements.

The downside to these programs is that there are lots of restrictions, paperwork, and the lender basically has a say in everything that goes on. You also need to apply for a mortgage.

Personal Loans

Another option is to take out a personal loan. Lenders seem to be pitching these a lot these days, perhaps because they can offer more attractive terms (for themselves).

While you might be able to get the home renovation funds you need without going through what can be a complicated home loan process, you’ll likely pay for the convenience.

These types of loans are notoriously expensive relative to mortgage-related options.

Some pros include fixed payments and no fees, and arguably that you’re not putting your house at risk by using the collateral because it’s an unsecured loan.

However, the interest rate will likely be higher than other options, and the loan amount may also be limited.

Cash Savings

You could just keep things simple and use cash from your checking or savings account, assuming you’re one of the Americans that actually has some.

It might also be possible to use a windfall such as a year-end bonus, tax refund, or inheritance to pay for home renovations.

The upside here is that there is no loan, no interest, and no hoops to jump through or any applications to fill out.

You simply pay cash and buy whatever you want, and use whichever contractor you choose.

The potential downside is you might burn through your safety net in the process. That cash might also be better served in a retirement account.

And using your home’s collateral for improvements means less of your money is at risk – you’re basically playing with the lender’s cash.

Buy a Flip

Another alternative is to simply by a house that is completely renovated. Instead of having to put in the work yourself and live in a construction site, just buy a turnkey property.

The upside is no additional costs, no annoying noise and mess, and it’s ready to go immediately.

The clear negative here is that the property will be more expensive, all else being equal. And possibly unaffordable if your purchasing power is limited.

They are often also located in less-than-desirable locations, which is why they look so good to begin with.

It’s hard to find something that is exactly what you want and there’s a good chance you’ll want to make changes regardless.

Do It Yourself (DIY)

Lastly, if you’re handy, you can just do the stuff yourself a save a lot of money.

While you’ll still need to pay for the costs of materials, it is the installation that is often the most expensive piece depending on the job at hand.

It can pay to learn how to do things yourself, and the internet has made it easier than ever to complete a variety of tasks without the help of a professional.

Of course, be sure not to get in over your head, especially if it involves potentially dangerous stuff like plumbing or electrical work.

Sometimes it’s better just to leave it to the pros…

Renovate Smartly

Whichever method you choose, be smart about how you approach it.

Like you would a mortgage, comparison shop among vendors and contractors to ensure you get the best price.

You’d be shocked at how much prices can vary for the same job/work.

The cost of materials, such as a slab or quartz, can also be negotiated, especially at smaller, non-corporate shops.

Also consider what you actually need to renovate.

It might be possible to cut corners in a bathroom or a kitchen and replace only certain fixtures, or simply freshen things up by painting and/or replacing knobs and faucets.

If you plan to sell at some point in the relatively near future, also consider how any changes will impact the marketability of your home. Try to stick to things that will increase your property value.